<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: June 30, 1999
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OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission File No. 0-26049
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Paddington Inc.
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(Exact name of small business issuer as
specified in its charter)
Delaware 59-2159951
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(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
Suite E, 15/F, Ho Lee Commercial Building, 40 D'Aguilar Street, Central,
Hong Kong or c/o Registered Agents, Ltd., 1220 North Market Street, Suite 606,
Wilmington, DE 19801
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(Address of principal executive offices)
(852) 2523-5522 or (302) 421-5750
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(Issuer's telephone number)
Not Applicable
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(Former name, former address and former fiscal year, if changed since last
report.)
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date:
6,000,000 common stock, $.0001 par value
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Transitional Small Business Disclosure Format (check one).
Yes No X
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<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting and pursuant to the rules and regulations of the Securities
and Exchange Commission. While these statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for fair
presentation of the results of the interim period, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the financial statements included in the Company's registration statement filed
on Form 10-SB on May 12,1999, as amended on June 1, 1999.
PADDINGTON INC.
(a development stage company)
BALANCE SHEET AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
June 30,
April 30, 1999
1999 Unaudited
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<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 600 $ 600
----- -----
Total current assets $ 600 $ 600
===== =====
capital assets -0- -0-
Other assets -0- -0-
Excess of purchase paid over book values -0- -0-
Security deposits -0- -0-
----- -----
Total other assets -0- -0-
----- -----
Total assets $ 600 $ 600
===== =====
Liability and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses -0- -0-
----- -----
Total liabilities -0- -0-
===== =====
Stockholders equity
Common stock-$.0001 par value,
authorized 120,000,000 shares
The number of shares outstanding
at June 30, 1999 was 6,000,000 $ 600 $ 600
Additional paid in capital
Accumulated deficit during development stage -0- -0-
----- -----
Total stockholders equity $ 600 $ 600
----- -----
Total liabilities and stockholders equity $ 600 $ 600
===== =====
</TABLE>
<PAGE> 3
PADDINGTON INC.
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the
For the year For the year quarter
ended ended ended
December 31, December 31, June 30, 1999
1997 1998 Unaudited
---- ---- ---------
<S> <C> <C> <C>
Income $ -0- $ -0- $ -0-
Costs of goods sold -0- -0- -0-
----- ----- -----
Gross profit
operations: -0- -0- -0-
General and
administration -0- -0- -0-
Depreciation and
amortization -0- -0- -0-
----- ----- -----
Total expense
Net Profit (Loss)
from operations $ (0) $ (0) $ (0)
Net income per
share-basic $ (0) $ (0) $ (0)
Total number of
shares outstanding -0- -0- 6,000,000
</TABLE>
<PAGE> 4
PADDINGTON INC.
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the
For the year For the year quarter
ended ended ended
December 31, December 31, June 30,
1997 1998 1999
Unaudited
------------ ------------ ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net profit (loss) $0 $0 $ 0
Depreciation and amortization 0 0 0
Non-cash transactions
officer loans 0 0 0
Total Cash Flows from Operations 0 0 0
Cash Flows from Financing Activities 0 0 0
Sale of stock 0 0 $600
Total Cash Flows from Financing Activities 0 0 $600
Cash Flows from Investing Activities
Capital assets 0 0 0
Loan receivable
Security deposit 0 0 0
Total Cash Flows from Investing Activities 0 0 0
Net Increase (Decrease) in Cash 0 0 $600
Cash Balance Beginning of Period 0 0 0
Cash Balance End of Period 0 0 $600
</TABLE>
<PAGE> 5
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
1. Forward-Looking Statements
The statements contained in this Report on Form 10-QSB that are not
historical facts are forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) that
involve risks and uncertainties. Such forward-looking statements may be
identified by, among other things, the use of forward-looking
terminology such as "believes," "expects," "may," " should" or
"anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve
risks and uncertainties. From time to time, the Company or its
representatives have made or may make forward-looking statements,
orally or in writing. Such forward-looking statements may be included
in various filings made by the Company with the Securities and Exchange
Commission (the "SEC"), or press releases or oral statements made by or
with the approval of an authorized executive officer of the Company.
These forward-looking statements, such as statements regarding
anticipated future revenues, capital expenditures, Year 2000 compliance
and other statements regarding matters that are not historical facts,
involve predictions. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or
implied by, these forward-looking statements. Potential risks and
uncertainties that could affect the Company's future operating results
include, but are not limited to: (i) economic conditions, including
economic conditions related to entry into any new business venture;
(ii) the availability of equipment from the Company's vendors at
current prices and levels; (iii) the intense competition in the markets
for the Company's new products and services; (iv) the Company's ability
to integrate acquired companies and businesses in a cost-effective
manner; (v) the Company's ability to effectively implement its branding
strategy; and (vi) the Company's ability to develop, market, provide,
and achieve market acceptance of new service offerings to new and
existing clients.
2. Development stage activities.
The Company has been a development stage enterprise since its
incorporation March 29, 1999 and for the three months ended June 30,
1999. During this period, management had devoted the majority of its
efforts to registering with the Securities and Exchange Commission
pursuant to Sections 12(b) or (g) of the Securities Exchange Act of
1934 (the "Exchange Act"). These activities were funded by the
Company's management aggregating $22,367 through June 30, 1999. The
Company has not expended any funds to June 30, 1999. The Company has
not yet generated sufficient revenues during its limited history to
fund its expenses.
3. Results of operations for the period from the Company's incorporation
on March 29, 1999 through June 30, 1999
For the period from the Company's incorporation on March 29,
1999 through June 30, 1999, (a period of approximately 3 months), the Company
generated net sales of approximately $-0-.
The Company's gross profit on sales was approximately -0-% for
the period from March 29, 1999 through June 30, 1999.
The Company's overhead costs aggregated approximately $-0- for
the period from inception March 29, 1999 through June 30, 1999.
4. Liquidity and capital resources.
The Company has increased liquidity by $600 from a cash
balance at the Company's incorporation of $0. The Company has been
funded through the process of selling shares of common stock in a
private placement aggregating $600 for the period March 29, 1999 to
June 30, 1999.
The Company did not expend any funds from March 29, 1999
through June 30, 1999 because the Company's management funded all
expenditures during this period.
The accompanying financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. The
Company incurred net losses of $0 for the period from incorporation on
March 29, 1999 to June 30, 1999. These factors indicate that the
Company's continuation as a going concern is dependent upon its ability
to obtain adequate financing. The Company will require substantial
additional funds to finance its business activities on an ongoing basis
and will have a continuing long-term need to obtain additional
financing. The Company plans to engage in such ongoing financing
efforts on a continuing basis.
<PAGE> 6
RESULTS OF OPERATIONS
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
At its Annual Meeting held on May 20, 1999, the Company's shareholders
unanimously resolved that: (i) Arthur Andersen & Co. were re-appointed
as Auditors of the Company until the conclusion of the next Annual
Meeting and at a fee to be arranged by the Directors; and (ii) the
existing Directors of the Company, Messrs. Yu, Wong and Lok, were
reelected as Directors of the Company until the next Annual Meeting of
the Company.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) 27.1 Financial Data Schedule (for SEC use only).
(b) The Company did not file a report on Form 8-K during the three
months ended June 30, 1999.
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Paddington Inc.
(Registrant)
Date: August 6, 1999 By: /s/ King-Kwok Yu
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Director, President, Treasurer, Secretary
And Controller
By: /s/ Richard C. K. Wong
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Director and Vice-Chairman
By: /s/ Hardy K. C. Lok
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Director and Chairman of the Board
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE THREE MONTH PERIOD ENDED JUNE 30, 1999 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> MAR-29-1999
<PERIOD-END> JUN-30-1999
<CASH> 600
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 600
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 600
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 6,000,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 600
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
